In a time of accelerating consolidation in the electronic media ecosystem, and eternally vigilant of the predators lurking beneath every rock, this site has sought out the protective embrace of the Scurvy News Network until further notice.

Join this recon patrol as it wriggles its way in 70 installments under the concertina wire of the long twilight struggle of our time. Click here for the free ebook Pontifical Years edition of Green Energy War, “a weird and unintended prequel” to 21 Machetes.

Would he have forsaken his chronicle of the Peloponnesian War in favor of the richer literary ore of California’s Proposition 16? Relive the spectacle of the most outlandish corporate flame-out in ballot box history. Click here for the free ebook, 21 Machetes.

Masquerading as a taxpayer protection committee, San Francisco utility PG&E has qualified the “New Two-Thirds Vote Requirement for Local Electricity Providers” for California’s June 2010 ballot. In trying to hardwire permanent business advantage for itself into the State Constitution, PG&E faces off against local governments, municipal utilities and irrigation districts that are prohibited by law from spending any funds advocating for or against ballot measures. PG&E has already contributed $6.5 million to the effort, and its board has reportedly authorized a $30 million budget. It is the only funder.

The targeted jurisdictions, including those trying to organize renewable procurement under the State’s community choice aggregation law, are core contributors to the pluralism that has been the wellspring of California’s policy innovations. Unavoidably, the Green Energy War will be focused for the next 20 weeks on fending off this assault. Battlefield updates will be posted at http://pgandeballotinitiativefactsheet.blogspot.com/

It wasn’t more than a few decades ago that acceptance of the merits of global tariff reductions enjoyed the same place in the catechism of forward-thinking policy elites that belief in anthropomorphic climate change occupies today.

As the pre-Copenhagen tussling between the US, China and India over border carbon fees suggests — on the surface, just a replay of threats made by France against the Bush-era US — stitching these two seemingly inconsistent canons together is likely to preoccupy the diplomatic class for some time to come. A more peculiar challenge, and arguably easier to resolve, is the rollback of tariff and non-tariff barriers to free trade in clean technologies.

A couple of years ago, a major World Bank study estimated that if tariffs and non-tariff barriers were removed on four basic “clean energy” technologies (wind, solar, clean coal and efficient lighting) in 18 developing countries with significant GHG emissions, there would be “huge gains” in the volume of trade ranging as high as 63.6%.

Based on this analysis, these barriers were seen as a “huge impediment” to the transfer of these technologies to developing countries — with the example highlighted of energy-efficient lighting in India subjected to a 30% tariff and a non-tariff barrier equal to 106%.

But developing countries argue that it’s the intellectual property rights afforded to “climate friendly” technologies that represents the real protectionism. The Group of 77 and China proposed in June “to mandatorily exclude from patenting climate-friendly technologies held by Annex II countries which can be used to adapt to or mitigate climate change.” Annex II refers to 24 developed countries identified in the UN Framework Convention on Climate Change.

As General Electric — sometimes viewed as a US national champion despite the fact that 53% of its assets reside elsewhere — told Congress this week

Such measures would be counterproductive from the point of view of combating climate change because they would deter innovation and technology deployment. In addition, they would be severely detrimental to US export interests … Companies will be careful to avoid licensing technology or even selling products to customers in countries where those customers could reverse engineer, take and use the intellectual property rights.

The G-20 summiteers in Pittsburgh two weeks ago may have stretched credulity a bit in their commitment to “phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption.” They were circumspect in their enthusiasm for statecraft’s more humdrum task of lubricating commerce in clean energy technology: “The reduction or elimination of barriers to trade and investment in this area are being discussed and should be pursued on a voluntary basis and in appropriate fora.”

Those looking to salvage some substantive achievement from a likely-to-disappoint Copenhagen might well focus here.

An odd but recurrent attribute of the waning months of any political administration is the self-incriminating re-examination of core precepts which flows from the lips of the hitherto devout. That process is well under way in the energy parishes of Gordon Brown’s Whitehall, but the free market unified field that has enveloped UK energy policy from Brown to Blair to Major to Thatcher may be shaking with more than just the usual tremors of self-doubt, remorse and regret.

The ramifications for the US are likely to be profound.

The most recent apostasy is last month’s energy security report from former Minister of State for Energy Malcolm Wicks. Under the banner heading, “Can market arrangements deliver an appropriate fuel mix?”, the Wicks report observes:

Many commentators argue that gas, the cheapest and quickest technology to install in significant mega-wattage, is likely to take an increasing share of the power generation market, to replace closing coal-fired stations, and also potentially some nuclear power stations in the middle of the next decade. These gas-fired power stations would then be a part of our power mix for decades afterwards…We would potentially be locking-in import-dependence at an uncomfortable level and have an unbalanced fuel mix leaving UK businesses and consumers highly exposed to future moves in international gas prices.

I believe that the Government needs to consider carefully whether there are cost-effective ways of avoiding this outcome. Effective demand reducing energy efficiency measures might be sufficient while extending the life of existing plant where feasible and legally permissible could also contribute, giving more time for the deployment of alternative generation technology including nuclear, with its long lead times. The Government and industry will wish to consider whether it needs to take a more strategic role in determining the fuel mix for power generation, perhaps within bands, to try to avoid a ‘dash for gas.’ If it did so, it would need to ensure that the regulatory and market structures provided sufficient assurance to operators that they would be able to sell the power that they generated to justify investment in non-fossil power-generation. This would be a significant move away from the ‘market knows best’ orthodoxy but it might be justified on energy security grounds. It would echo the welcome moves to ensure that sufficient renewables capacity is installed.

The Financial Times catalogued the most dirigiste of the recommendations, and the Tories zeroed in on Wicks’ recommendation that Britain triple its reliance on nuclear power from today’s 12-15% to 35-40% by 2030. “If companies want to build new nuclear plants without subsidy they are very welcome to do so, and we are clear that the UK is a very attractive place for new nuclear investment,” the shadow energy minister Charles Hendry said. “But if you set an aspiration like that, the danger is that the industry will say: ‘If you want that, we have to have a subsidy’.”

But the sacrilege seems to be gaining momentum. Former Tony Blair confidante Lord Browne of Madingley, the past CEO of British Petroleum who now serves as president of the Royal Academy of Engineering, is perhaps the most prominent heretic:

… we must fundamentally rethink the objective of energy policy in this country. Competition has been the guiding star of UK energy policy since the 1980s and it worked well while there was a surplus of energy infrastructure capacity. But price competition is now failing to deliver the new, more diversified infrastructure that we urgently need to bolster energy security and meet our climate change targets.

I remain convinced that the market is the most effective delivery unit available to society. But the market will need a new strategic direction, and a new framework of rules, laid down by government.

In an interview with the Guardian, Lord Browne compared the current need for urgent investment and new infrastructure with efforts to develop North Sea oil and gas fields in the 1970s and 1980s. “High oil prices provided a strong market pull. But governments also gave industry a helping hand, creating generous tax incentives and regulations, and helping to build strategic infrastructure,” he said. “There’s even more cause for government intervention today. That’s because energy security and climate change mitigation are public goods. They would not otherwise be recognised by the free market.” Browne said the UK risked being left behind in the global race to develop a low-carbon industry if ministers relied on market mechanisms such as carbon trading to drive change. “A lot of people say carbon trading, the European emissions trading scheme, will take care of this. In theory it can, but in practice it won’t.”

Historians will find it difficult to measure the relative efficacy of UK vs. US energy policy these past 35 years, and may well view the comparison as a race to the bottom denominated in squandered opportunities, abdication of responsibilities and willful avoidance of unpleasant facts. But the commonalities will outnumber the differences, which makes the current ecclesiastical unraveling in Britain so pertinent.

The following remarks were delivered to the Center for Energy Efficient and Renewable Technologies (CEERT) at their Clean Power Champion award ceremony September 2, 2009, in Sacramento, California.

I’d like to thank CEERT for the recognition, and especially for the personal honor of being on the same program with two individuals I have long admired — Alan Lloyd and Bill Stall. Alan has had a larger say in rethinking what society should expect from its vehicular transportation than perhaps anyone alive. And, for somebody like me who went to college planning to be a journalist, Bill Stall epitomized the enduring and ennobling power of the written word when enlisted for humanity’s betterment.

I’d also like to recognize the CEERT staff for two things for which we are all indebted.

First, they have been the heart and soul of California’s Renewable Energy Transmission Initiative, spending countless difficult hours in stakeholder meetings to identify needed transmission routes that are consistent with our environmental values. The future of California’s utility-scale solar and wind and geothermal development will be determined by the use which is made of their work product.

And second, they deserve thanks for the unyielding insistence they have brought to the renewable energy debate — in every public forum — that we focus on megawatts rather than megawords.

When the 20% Renewable Portfolio Standard was signed into law in 2002, California derived 11% of its electricity from renewable sources. In 2008, that number was 10.6%. Every school child in California knows that most of that comes from policies enacted when Jerry Brown was Governor some 30 years ago. Since 2002, we have changed the fundamental direction of climate and energy policy in this country. And we’ve spread a California gospel about efficiency and renewables across the globe. But we’ve yet to move the needle in terms of our own electricity generation.

CEERT keeps us focused on how much there is still to do, and I’m proud to be associated with each of you. Thank you.

You’ve got to wonder what went through Duke CEO Jim Rogers’ mind yesterday when he saw the Areva announcement of more cost overruns and schedule delays for its new reactor construction project in Finland.

Areva reported that it would set aside another $787 million to cover anticipated losses on the Olkiluoto project, bringing the total of such charges against earnings to $3.3 billion on what was originally supposed to be a $4.3 billion turnkey project. That’s a 77% overrun. Oh, and the plant is already three years behind schedule.

It was only 75 days ago that Rogers, aka “Duke Nuke ‘Em” to Wall Street Journal readers, was sharing the spotlight with Areva’s telegenic CEO Anne Lauvergeon in Piketon, Ohio to announce plans to build a new 1,600 MW reactor. “I’m confident I can fund it,” Rogers told the New York Times. A bit more restrained, Ms. Lauvergeon said that the financing was an issue for Areva’s customers, not for Areva itself.

The romance between Areva and its first real customer, the Finnish utility TVO, has definitely cooled. Yesterday Areva said it “will only commence the final phases of the construction when TVO has agreed upon the proposals that have been made or issued contracts that provide for the requested modifications.” These proposals and contract modifications, Areva said, were due to TVO’s “inappropriate behavior in contract management” including conduct which “is not in line with standard industry practices.”

As described in yesterday’s Energy Daily (subscription required):

Delays at Olkiluoto have been unfortunate for the nuclear industry as a whole, which has watched the Finnish project with interest as the first new reactor to be built in a western country in years. It is also a high-profile project for Areva as the first commercial deployment of its EPR reactor, although France’s national utility, EDF, has since begun to build another EPR in Flamanville, France.

Duke’s earlier experiences with nuclear construction weren’t altogether pleasant. It pulled the plug on two of its five planned projects, incurring some $600 million in cancellation costs but recovering about a third of that through rate increases. Still, Rogers is banking on a nuclear play to get the climate legislation through the US Senate. As he told Platts in an interview last week:

“We need to find a way for the four to nine Republican senators who are strongly pro-nuke to craft a nuke provision that would bring them in support of a bill,” Rogers said, noting this would create centrist bipartisan support. Without naming the senators he saw in this group, he added that there has not been talk of such an amendment to his knowledge.

A nuclear amendment could have provisions to bring confidence in nuclear waste disposal, speed license approvals, or provide loan guarantees not to utilities but those providing the equipment for the new units as a local economic stimulus option, he said.

So the role to be played by Areva, which is 91% owned by the French government, in the US Nuclear Renaissance is still to be determined. But the role of the American taxpayer may be coming into focus.

Today’s New York Times breaks the not quite earthshaking news that a quarter of LEED-certified buildings do not save as much energy as their designs predicted. Last week the US Green Building Council (USGBC), which administers the LEED (“Leadership in Energy and Environmental Design”) program, announced that it would begin collecting energy consumption information on a voluntary basis from all the buildings it has previously certified. That comes on top of a new requirement this year that conditions LEED certification of a newly constructed building on provision of all energy and water bills for the first five years of operation.

A study performed for the USGBC last year by the New Buildings Institute found that 21% of LEED-certified buildings had energy performance below even a code-compliant building. Even more troublesome, the 2008 study suggested that energy performance monitoring might be something of an afterthought for most LEED building owners: only 121 of the 552 that had been certified under LEED for New Construction Version 2 through December 2006 were able to supply the full year of post-occupancy energy numbers required to participate in the study. Collecting the data for even this small pool of projects required “an extraordinary level of effort” according to Brendan Owens, USGBC vice president of LEED technical development.

While hard-bitten types have been critical of the feel-good, easy-to-be-green aura of the LEED process for some time, it’s the capacity for self-correction and commitment to increasing empirical rigor that is the real story here. Ethicists have long debated whether human endeavors are best judged by their intent or by their consequences. The USGBC has made clear that in the Green Energy War it will be results that count most.

While receiving little attention in the popular press, and perhaps even less in Washington, D.C., you can be assured that Moody’s stern admonitions this June about the financial risks posed by new nuclear plants (“a bet the farm risk for most companies”) has been carefully read by every utility CEO and CFO weighing future supply options.

With a world-weariness typically associated with excessive recitation to errant children of broadly understood truths (at least among that subset of Wall Street which follows utility finance), the words used in the 21-page rebuke were unrelenting:

“Moody’s is considering taking a more negative view for those issuers seeking to build new nuclear power plants.”

“But from a credit perspective, the risks of building new nuclear generation are hard to ignore, entailing significantly higher business and operating risk profiles, with construction risk, huge capital costs, and continual shifts in national energy policy.”

“Few, if any, of the issuers aspiring to build new nuclear power have meaningfully strengthened their balance sheets, and for several companies, key credit ratios have actually declined.”

“Moreover, recent broad market turmoil calls into question whether new liquidity is even available to support such capital-intensive projects.”

“History gives us reason to be concerned about possible significant balance-sheet challenges, the lack of tangible efforts today to defend the existing ratings, and the substantial execution risk involved in building new nuclear power facilities.”

“Historical rating actions have been unfavorable for issuers seeking to build new nuclear generation — of 48 issuers evaluated during the last nuclear building cycle (roughly 1965-1995), two received rating upgrades, six went unchanged, and 40 had downgrades. Moreover, the average downgraded issuer fell four notches.”

“We view new nuclear plans as a ‘bet the farm’ endeavor for most companies, due to the size of the investment and length of time to build a nuclear power facility.”

“We increasingly sense that none of the issuers actively pursuing these endeavors have taken any material actions to strengthen their balance sheets.”

“As a result, it has become increasingly likely that pursuit of new nuclear projects will result in some near-term rating actions or outlook changes.”

Moody’s also cautioned utilities not to be taken in by the current political enthusiasm for nuclear projects in some quarters:

New nuclear power construction appears to enjoy strong political and regulatory support in a number of jurisdictions, especially the southeastern states, where there is now legislation afoot to promote it …

Nevertheless, regulatory risks will persist over the longer term, and we increasingly think it unlikely that everything will work out as intended. We are concerned with the size of the investments being made even before the NRC grants a COL; the ongoing potential risks from displacement technology developments over the course of the construction period; and the recovery of sizable sunk costs, should an issuer abandon a project in the future.

These longer-term risks are difficult to quantify today, but the possibility of abandoning a construction project should not be fully dismissed, regardless of the low probability of such an occurrence today. We remain concerned that should an issuer walk away from a nuclear project, for whatever reason, its multi-billion investment may not be fully recovered, or it may be amortized over a long-term period. This could introduce some material financial distress for almost any issuer.

Those more conditioned to getting such facts-of-life advice from country music might heed the words of Denise Rains:

You can roll the dice and take your chances, risk it all on him like I did.

Who knows? You might get lucky. But as for me, it ended ugly.

You can hold onto the hand you’re holdin’ when you know you should be foldin’.